Hyundai Motor Group will strengthen production of electric and hydrogen cars
Korean carmaker Hyundai Motor Group is actively developing its green transport business. Together with Kia Corp, the group announced record investments in hydrogen and electric vehicles, and it has earmarked 24.3 trillion won (US$16.65 billion) for its development.
Distributing the investment
Hyundai is one of the world’s top three car sellers. To maintain its global leadership, Hyundai plans to increase its domestic investment by 19%. These steps are part of the company’s development strategy to ensure business growth during the crisis. Hyundai has faced problems due to the world’s economic and geopolitical uncertainties.
The investment amount outlined is distributed as follows:
1. The research and development sector for new electrification products will receive US$7.84 billion. These funds will go towards developing hydrogen-powered and software-defined vehicles.
2. Regular investment of US$8.18 billion will optimise production lines.
3. A strategic investment of $545 million will fund autonomous driving technology development.
Following the announcement of the record investment, Hyundai Motor and Kia’s shares rose. The value of Hyundai Motor shares increased by 2.3%, and Kia shares increased by 3.8%.
Risks and development plans
Hyundai Motor Group’s investment is a positive signal not only for the market but also for the country’s economy. South Korea is going through a difficult time due to the political crisis. According to the group’s chairman, Eisun Chon, the business is under pressure from both internal and external factors. Internal risks include the recession and the impeachment that has been announced in the country for early 2025. External factors include the US raising tariffs on imported goods.
The company opened a new plant in the US in 2024. This was facilitated by tax incentives offered to carmakers by the previous president’s administration. However, Donald Trump has promised to remove these incentives and increase tariffs. Nevertheless, the US remains a key market for the manufacturer. To strengthen its position in the region, Hyundai plans to increase production of electric cars. This will not only allow it to take advantage of new tax breaks under the Inflation Reduction Act but also compensate for weak demand in the South Korean market.
In addition, Hyundai is actively developing the low-cost car business and improving the availability of its products. The company has optimised the car purchase process, reducing it to 15 minutes.
Hyundai’s commitment to environmental issues is also noteworthy. In order to meet climate targets, the company intends to step up the development of hydrogen-powered cars. Hyundai also offers a wide range of electric and hybrid vehicles.
